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TG3 SaaS/Glossary/Viral coefficient
SaaS metrics glossary

Viral coefficient (K-factor).

The number that decides whether your product grows itself. Here is what the viral coefficient is, how to calculate it and why almost nobody truly has one above 1.

Definition
The viral coefficient or K-factor, is the number of new users each existing user brings in through invites. Above 1 means self-sustaining growth.

A K-factor above 1 means each user brings more than one new user and growth compounds on its own. It is rare. Most products that claim to be viral have a coefficient well under 1, which means referrals help but do not carry growth.

How to calculate it

How to calculate the viral coefficient.

K = invites per user × invite conversion rate
Invites per userhow many invitations the average user sends
Conversion ratethe share of invitations that become active users

Even a K below 1 lowers blended CAC, see customer acquisition cost.

Benchmarks

Why a viral coefficient above 1 is rare.

True virality, a K-factor sustained above 1, is extraordinarily rare and usually short-lived. Most products with real referral programs run a coefficient between 0.2 and 0.7, which meaningfully lowers acquisition cost without carrying growth on its own.

That is still valuable. A coefficient below 1 is not a failure. It is a discount on every other channel, since each cohort partly seeds the next. Chasing a mythical K above 1 is less useful than steadily nudging the one you have upward.

How to improve it

How to improve your viral coefficient.

01

Build sharing into value

The strongest loops are baked into using the product, not bolted on as a referral page.

02

Lower invite friction

Every step in the invite flow drops your conversion rate. Cut them.

03

Reward both sides

Two-sided incentives lift both invites sent and invites accepted.

04

Treat it as a discount

Even a K under 1 lowers blended CAC. Optimise it, do not worship it.

Common questions

Questions about viral coefficient.

What is the viral coefficient?+

The K-factor, the number of new users each existing user generates through invitations.

How do you calculate the viral coefficient?+

Multiply the average number of invites each user sends by the share of those invites that convert into active users.

What does a viral coefficient above 1 mean?+

Each user brings in more than one new user, so growth becomes self-sustaining. It is rare and usually short-lived.

Is a viral coefficient below 1 bad?+

No. A coefficient under 1 still lowers blended acquisition cost because each cohort partly seeds the next. It just does not carry growth alone.

Customer acquisition costProduct-led growthActivation rateCustomer acquisition channelsGrowth loops

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